Employee lifestyle benefits have become a top priority for people operations leaders.
We’ll dive into all of their advantages later in this guide, but to put it simply — it’s because …
… traditional benefits alone no longer meet employees’ evolving needs.
What used to be standout lifestyle benefits (also sometimes called perks) — things like unlimited coffee, free food, and the flexibility to work hybrid or remotely — have become baseline expectations. Prospective employees of your organization won’t view them as differentiators and aren’t going to be very impressed if that’s all you’ve got.
When you offer the best employee benefits, your company can unlock a truly personalized experience for your employees’ diverse needs so they feel supported and equipped to thrive at your company, whether your team is fully remote, hybrid, or back in the office.
On the Compt platform, lifestyle benefits have become a foundational part of compensation design, with 65% of Compt customers now offering all-inclusive LSAs and average funding rising to $1,029 per employee.
What are lifestyle benefits?
First, a definition:
Lifestyle benefits, sometimes referred to as employee perks, are nonsalary benefits that help employees improve their overall well-being and lifestyle. They extend support beyond standard medical, dental, and vision benefits.
Modern companies turn to lifestyle benefits to broaden employee access to goods and services that improve all areas of their lives, including mental and physical health and financial and household needs
The categories employee lifestyle benefits can cover include:
- Health and wellness
- Professional development
- Childcare
- Elder care
- Pet care
- Fertility benefits and menopause support
- Productivity tools and apps
- Food and groceries
- Student loan repayment assistance
- Financial wellness benefits
In practice, Compt lifestyle benefits are delivered through lifestyle stipends — flexible reimbursements that let employees choose the vendors and services that fit their lives.
What are the advantages of lifestyle benefits?
Lifestyle benefits are now a core part of modern compensation strategies. Here’s why more companies are embracing them, with reasons that represent the advantages of offering a lifestyle benefits program:
1. You gain a competitive edge among current and future talent.
Most companies already offer fair compensation and standard benefits, like PTO and medical, dental, and vision benefits. So, how can you stand out?
Offering Lifestyle Spending Accounts is a powerful way for employers to differentiate themselves in a crowded hiring market while staying true to their organizational values and building culture along the way.
2. You directly impact employee engagement and retention, two persistent people challenges.
Even companies with very generous overall benefits packages can suffer from high attrition and low employee engagement and productivity. Gallup continues to report high levels of stress and disengagement globally, making personalization in your benefits package utterly critical.
Offering employee lifestyle benefits that are customized to your people’s unique needs is hugely beneficial for companies wanting to increase employee engagement and retention over the long term as workplace conditions evolve.
(Compt customers routinely see 90%+ participation with lifestyle benefits. We’d be happy to show you how.)
3. You create and sustain an inclusive company culture.
Companies are expected to build inclusive workplaces and to show that commitment through real, equitable support.
Lifestyle benefits can be designed in a way that addresses all of the needs of your diverse workforce, whether that means supporting an employee who’s a 22-year-old recent graduate who lives in the city with a cat or a 55-year-old executive with three kids and a home in the suburbs. Flexible perk stipends are ideal for that type of personalization and inclusivity.
4. You balance impact with cost efficiency, because lifestyle benefits are inexpensive compared to salary.
There are many reasons you might not want or be able to offer employees a pay increase; budgets for raises have remained relatively flat. When increasing your people’s compensation isn’t an option, offering meaningful lifestyle benefits can be powerfully effective in making them feel supported — sometimes even more than a simple pay bump.
It also keeps costs low for you, especially if you use a lifestyle benefits platform like Compt, which uses a reimbursement-based workflow to automate tax compliance and reduce administrative time and effort.
On the Compt platform, the average annual stipend funding is $1,029 per employee — a predictable, cost-efficient investment.
This trend toward expanded and personalized employee lifestyle perks and benefits — and away from cookie-cutter basic benefits packages — has been a long time coming. Employees have been asking for more flexibility and choice in their total compensation for years.
According to Randstad’s Workmonitor 2025 research, work-life balance now outranks pay as the top job factor for 85% of employees worldwide — and for the first time, it also surpasses pay as a motivator for 79% of respondents. This shift underscores why companies are expanding lifestyle benefits; the support employees value most today goes far beyond salary.
When was the last time you conducted an employee benefits survey to see what your people want? Now is the perfect time to re-evaluate and revamp your outdated perks programs to better support your employees’ lifestyle needs. If you’re looking for inspiration, here’s a helpful resource detailing employee engagement ideas for remote workers.
Comparing employee perks platform vendors? Check out our guide for everything you need to know.
How much do your current perk vendors cost? How can you save money?
Input some basic data into our Perks Vendor Cost Calculator to identify how much you’re spending on all of your vendors and how much you can save by consolidating with Compt.
Examples of employee lifestyle benefits offered by top companies
The list of companies offering flexible and inclusive lifestyle benefits is ever-growing, but here are a handful that stand out as great examples:
Google has offered several lifestyle benefits over the years. During the shift to remote work in 2020, the company provided a one-time $1,000 work-from-home stipend to help employees set up their home offices. Google has also offered programs like “baby bonding bucks,” a $500 stipend for new parents to help cover essentials during the early weeks of parenthood. These offerings highlight Google’s ongoing investment in employee well-being and flexibility across locations and life stages.
Starbucks
Starbucks offers lifestyle benefits focused on education and long-term growth. Eligible partners can receive up to $1,000 per calendar year in tuition reimbursement for courses at accredited institutions. Through the Starbucks College Achievement Plan, qualifying employees pursuing an online degree from Arizona State University receive 100% tuition coverage.
Deloitte
Deloitte provides employees with a flexible annual well-being subsidy of up to $1,000 that can be used for a wide range of wellness-related expenses, from fitness subscriptions to more unconventional items like Lego sets or ergonomic gear. This program emphasizes personalization of well-being, allowing employees to choose what matters most for them.
Eventbrite
Eventbrite supports employee health through a $60-per-month wellness stipend. In addition, they offer remote-work stipends, wellness reimbursements, and broader support for home-office productivity and caregiving.
LinkedIn — which knows a thing or two about the workplace — offers one of the most flexible and generous lifestyle benefits programs in the market. Employees receive a $2,000 annual wellbeing allowance that can be used on fitness, hobbies, home services, childcare support, travel, or other lifestyle needs, reflecting LinkedIn’s belief that well-being is deeply personal. LinkedIn has also used stipends and reimbursements to help employees create comfortable and productive home-office setups.
Carrot Fertility
Carrot uses Compt to support employees around the world with flexible lifestyle benefits that adapt to different life stages and household needs. With Compt’s vendor-agnostic model, Carrot employees can spend their stipends on what matters most to them, including family and wellness expenses, productivity tools, and everyday essentials.
As Carrot’s CHRO puts it:
“It’s been a really easy and fun way to offer perks, which has added to the experience our employees are having. It’s a low lift on the HR side, which goes a long way.”
There are many more examples of companies doing this successfully. If you want to hear what our customers are doing, click here to talk with a Compt lifestyle benefits specialist.
Note: Benefits can change over time, so always check each company’s careers page for the latest details.
Learn even more about the benefits of lifestyle stipends
Download the free eBook to find out why lifestyle spending accounts have become the most common new benefit for companies competing for top talent.
Ways to structure lifestyle benefits (and what most companies do)
There are several ways you can offer lifestyle benefits. You actually might already be offering some sort of lifestyle benefit that can easily be turned into a more thought-out lifestyle benefits program. Examples include a professional development stipend, a gym membership reimbursement, or meal reimbursements, all of which can be expanded into a more intentional lifestyle benefits program.
Regardless of what you currently offer, getting started is straightforward. Here are two main ways to offer lifestyle benefits:
1. Offer individual lifestyle benefits focused on one area at a time.
Like some of the examples listed above (e.g., Starbucks’ tuition reimbursement program), many companies start with a single category and build from there. This approach works well when you want to meet a specific need without introducing multiple new processes at once.
Category-specific stipends are some of the most common programs among Compt customers. These stipends are easy to launch, flexible, and simple to manage.
This snapshot shows what one customer’s health and wellness lifestyle stipend benefits look like with Compt. Click here to talk with a Compt lifestyle benefits specialist to learn more.
2. Offer all-encompassing stipends to support a diverse set of lifestyle benefits.
If you want to cover multiple lifestyle needs without adding administrative overhead, an all-inclusive stipend — often called a Lifestyle Spending Account (LSA) — can consolidate everything into one flexible benefit.
This structure allows you to support a diverse set of needs, situations, and preferences at scale. As a people operations professional, you know firsthand that what someone needs today might be different next month (and will likely be different next year). An all-inclusive approach ensures your lifestyle benefits evolve alongside your people.
Among Compt customers, most companies that offer lifestyle benefits through our stipend software select one or more of the following broad-based categories for employees to spend in:
- Health and wellness
- Cell phone
- Learning and development
- Family
- Food
- Travel
- Pets
- Productivity
- Tech and equipment
- Student loan repayment
- Charitable giving
- Internet stipend
- Swag and branded merchandise
And this isn’t representative of all our 28 categories! For example, it doesn’t include stipends like a birthday or anniversary bonus. Taking a flexible, vendor-agnostic approach helps avoid the headache of keeping track of multiple vendors and instead gives your employees autonomy of choice.
Ready to see for yourself? Request a demo of Compt today.
FAQs: Lifestyle benefits
Lifestyle benefits are flexible, people-first perks that support employees’ diverse needs, including wellness, family, financial well-being, and productivity. Offering lifestyle benefits signals a real commitment to employee support, which can improve retention, reduce stress, and help your company stand out in a competitive market. They also meet what today’s workforce prioritizes most: personalization and work-life balance.
What is the difference between Lifestyle Spending Accounts (LSAs), stipends, and perks?
-A Lifestyle Spending Account (LSA) is a flexible, all-in-one stipend that covers multiple categories in a single program.
-A stipend is a fixed amount of money employees can spend in one category (e.g., wellness, learning).
–Perks are individual benefits or discounts that enhance work-life balance but are typically more limited or vendor-specific. They can be monetary or nonmonetary.
At Compt, lifestyle benefits are powered by lifestyle stipends, which give employees freedom of choice without managing multiple point solutions.
Why not give employees cash instead of offering lifestyle benefits?
Cash is easy to overlook in a paycheck and typically gets absorbed into general household expenses. Lifestyle benefits ensure funds are used for meaningful support related to wellness, family needs, professional growth, productivity tools, and more. A stipend program through Compt also ensures fairness, consistency, and clear IRS-compliant reporting.
What are the typical implementation timelines for rolling out lifestyle benefits software?
Compt’s implementation is fast and straightforward. Most customers launch in about two weeks, depending on company size and program complexity. Our Customer Success team guides you through setup, payroll/HRIS integration, category selection, and rollout to help you meet your timeline goals.
What are the pros and cons of using Compt for lifestyle benefits?
– True flexibility: Vendor-agnostic model with 27+ eligible categories; 70% of all purchases occur at local and independent businesses.
– Compliance and visibility: 100% IRS-compliant, SOC 2 and GDPR aligned, with audit-ready reporting and direct payroll/HRIS integrations.
– High participation: Customers see 90%+ participation thanks to simplicity, mobile access, and Slack/Teams integrations.
– Global programs: Support for 75+ countries in multiple currencies and customizable categories by department or region.
– Responsive support: Average 34-minute response time and a partner-led approach that reduces admin work.
Cons:
– Reimbursement-based model: Employees pay upfront and get reimbursed.
– No prepaid card or vendor marketplace: This is the tradeoff for unlimited choice and zero card declines.
– English-only interface: Although globally supported, the UI is currently offered in English only.
– Not for pre-tax accounts: Compt doesn’t administer FSAs, HSAs, HRAs, or COBRA.
Overall, most employers find these tradeoffs minimal compared to the benefits of flexibility, compliance, and employee happiness.
Are lifestyle benefits taxable?
Many lifestyle categories — including wellness, food, family, travel, and pets — are considered taxable by the IRS. Others, like cell phone, internet, commuter benefits, and professional development, may qualify as nontaxable, depending on how they’re structured. Compt automatically codes all reimbursements as taxable or nontaxable so you stay compliant.
How do companies design LSAs or multicategory lifestyle stipend programs?
Most employers start by identifying one or two core needs (e.g., wellness + food) and expand into an all-inclusive LSA once participation grows. According to Compt’s 2025 Midyear Lifestyle Benefits Benchmark Report, 65% of Compt customers now offer all-inclusive LSAs, and 77% fund them quarterly — a cadence that balances employee autonomy and operational predictability.
Can I offer lifestyle benefits to a global or distributed workforce?
Yes. Compt supports employees in 75+ countries with multicurrency capabilities, local tax treatment, and customizable categories by region. LSAs are especially effective for global teams because every employee chooses what works in their country or culture without you having to manage local vendors.
How fast do employees get reimbursed?
Compt processes most reimbursements within 2-3 business days once receipts are submitted, and all reimbursements flow directly through your existing payroll system. This maintains compliance and ensures a smooth employee experience.
Can I offer cell phone, internet, commuter, or work-from-home stipends?
Yes. These are some of the most commonly offered lifestyle stipend categories. They can support remote, hybrid, and in-office employees equally well — and many of these expenses can be structured as nontaxable. Employers often bundle them into an LSA to reduce vendor management and streamline benefits budgets.
Can lifestyle benefits include AI tools, GLP-1 support, or modern wellness categories?
Yes. Many companies now offer stipends that cover AI productivity tools, GLP-1 wellness support, mental health services, wearables, and specialized wellness programs. LSAs make it easy to expand categories as new needs emerge without adding vendors or renegotiating contracts.
How do lifestyle stipends compare to FSAs, HSAs, or HRAs?
FSAs, HSAs, and HRAs are pre-tax medical accounts with strict IRS rules. Lifestyle stipends (and LSAs) are fully flexible, post-tax stipends employees use for everyday needs. They’re easier to manage and support a broader set of categories — but they don’t replace medical or dependent-care accounts. Compt does not offer pre-tax accounts.
What’s the ROI of lifestyle benefits?
Lifestyle benefits help reduce stress and support well-being. On the Compt platform, participation averages 90%+, and employees spend 70% of their stipends at local and independent businesses that directly improve their daily lives. These programs often cost far less than expanding your salary budget, and they have a greater impact on employee experience.
Do lifestyle benefits work for hourly, part-time, or seasonal employees?
Yes. Stipends are one of the most equitable benefits for variable-hour and front-line roles. Employers can customize eligibility by job type, region, department, or start date and can prorate stipends for hourly teams without adding complexity to payroll.
Editor’s note: Originally published in 2021, this post has been recently updated for clarity and relevance for our readers.
